MGCR 331 Chapter Notes - Chapter 8: Network Effect, Monopoly, Information System
17 Apr 2017
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Document Summary
Network effects: strategies for competing in a platform-centric, winner-take-all world. Network effects = metcalfe"s law = network externalities . When network effects are present, the value of a product or service increases as the number of users grow. 8. 2 where does all that value come from. Every product or service subject to network effects fosters some kind of exchange. Firms leveraging technology ones and zeros of digital storage. Power is particularly important for consumers of technology products. A lot of investment (in learning how to use the system, buying and installing software, entering preferences or other data, creating files) The concept of staying power (and the fear of being stranded in an unsupported product or service) is directly related to switching costs. Switching cots can strengthen the value of network effects as a strategic asset. Those products or services that add additional value to the network. Platforms: products and services that encourage others to offer complementary goods.
